This peer review analyses the performance and coherence of Finland’s development co‑operation system in relation to its objectives. It highlights successes and challenges and provides recommendations for the future. The report was prepared with peer reviewers from Austria and Czechia with the support of the OECD Secretariat. A representative of the civil society platform organisation, Finnish Development NGOs Fingo, served as an Observer to the review.

Over the review period Finland made significant strides towards more effective and efficient development co‑operation. Following Finland’s last peer review in 2017 the Ministry for Foreign Affairs (MFA) invested in strengthening its systems, including results measurement and knowledge tools for greater impact. A more strategic approach to multilateral partnerships coupled with clear political ambition to work towards reducing poverty and inequalities have also contributed to Finland’s strong reputation as a partner for sustainable development in recent years.

Finland’s development co‑operation system has strong foundations but is going through a period of flux, with several major changes taking place simultaneously. Finland’s foreign and security context changed drastically with Russia’s large‑scale invasion of Ukraine in 2022. New foreign and security and international trade and development co-operation reports, published in June and July 2024 respectively, embed key shifts in focus, including the reallocation of resources towards Ukraine and the more explicit use of development co‑operation resources to support the internationalisation of Finnish companies. A significant reduction in Finland’s official development assistance (ODA) budget – by approximately 25% – is being implemented over 2024‑27, and a reform of the Foreign Service is resulting in the reallocation of resources and responsibilities in the MFA. A comprehensive review of the legislative framework for development co-operation is also ongoing over 2024‑26. The far‑reaching implications of these changes frame this peer review and make this an important but complex moment for the system.

The further reduction of Finland’s ODA budget is undermining its commitment to support those most in need. Finland’s commitment and leadership to reach those most in need have been hallmarks of its development and foreign policy. ODA is a limited resource with unique comparative advantages over other sources of development finance in that it is non-profit seeking and countercyclical. Planned cuts to the ODA budget over 2024-27 include Finland’s bilateral and multilateral budget lines as well as humanitarian assistance. As Finland seeks to make the most of its declining ODA resources, targeting ODA to where it is most needed, primarily the poorest and most fragile contexts, will be important. Getting back on track to meeting the international commitment of allocating 0.7% of gross national income (GNI) as ODA and returning to the United Nations (UN) target on ODA to least developed countries (LDCs) will also be in line with the ambition to maintain Finland’s reputation as a reliable and values-based partner.

The involvement of more actors in Finland’s development co‑operation has good potential if guided by sustainable development and effectiveness principles and supported by expertise and resources. Finland’s policies have long recognised the impact of diverse policy areas and actors on the prospects of developing countries. This is demonstrated by the importance given to policy coherence for sustainable development and responsible business conduct as part of Finland’s efforts towards achieving the 2030 Agenda over recent years, and Finland’s own private sector has built a strong reputation on human rights and the integration of the Sustainable Development Goals. New foreign and development policies published in 2024 reiterate the importance of ODA resources being catalytic and emphasise the need to involve a greater range of actors in international co‑operation. For this to be effective, it will be critical to reinforce a sustainable development focus, backed by an adequately resourced MFA, robust development expertise, and strong political leadership that actively promotes sustainable development across the government and society. Meeting Finland’s ambitions to use ODA catalytically to fill development financing gaps will also require an even stronger focus on partnerships in order to mobilise the amounts needed and shift global resources beyond what is possible by Finland’s own private sector.

With reduced bilateral country programmes and diminishing human and financial resources, the MFA will need to manage for fragmentation. Finland’s development co‑operation is shifting away from bilateral country programmes, starting with the closure of four of its nine bilateral country programmes by 2025. Over the review period, bilateral programmes have brought coherence, co‑ordination, and a focus on impact to Finland’s bilateral engagement and to its multi‑bi programmes with UN Women and the UN Population Fund. With a greater number of Finnish actors, fewer bilateral programmes bring a risk that partner country engagement becomes more ad hoc and fragmented. Reduced MFA country presence on development issues, cuts in personnel in embassies and reduced staff time to focus on sectoral policy in Helsinki also raise important considerations. For example, such changes limit the potential for Finland to engage in EU delegated co‑operation projects and support Global Gateway, policy priorities. In addition to retaining development expertise and knowledge within the MFA and the broader development system, making use of existing tools, such as comprehensive and publicly available country strategies that draw on sound context and stakeholder analysis, will be important to help to manage the risk of fragmentation.

Continuing to align to core values will ensure Finland remains a reliable partner and leader on key issues. The June 2024 foreign and security policy report articulates Finland’s intention to “take advantage of its reputation as a good and reliable partner and as a pioneer in the fields of technological development, education and the rights of women and girls.” A human rights-based approach and gender equality are clear areas where Finland has had global reach and impact over the review period, by effectively and consistently aligning its engagement with these values. Its good reputation in these and other areas has also been linked to the skills and expertise of its public servants, enabling Finland to build trust and dialogue and to have convening power in the multilateral system beyond its size. Continuing to invest in these core capacities within the MFA and aligning its partnerships and engagement with these values will be key to Finland’s continued positive reputation and effectiveness in influencing and shaping multilateral processes.

Robust results and risk management systems developed by the MFA stand Finland in good stead as it pivots resources and policies to Ukraine. Since Finland’s last peer review, the MFA invested substantially in strengthening results and risk management systems. Robust results‑based management including an effective, independent evaluation function has supported accountability and communication and provides a solid basis for evidence‑based decision making. As Finland cuts and reorients its ODA, maintaining these mechanisms will be critical to inform choices, including a greater focus on private sector partnerships, and ensure continued attention to development additionality. The closer integration of foreign policy objectives and emphasis on working multilaterally are opportunities to continue evolving Finland’s results‑based management. In the context of more ODA being channelled to Ukraine, it will also be key to adapt MFA risk management by building on the work already invested.

Transparency, consultation and development awareness need continued attention. Finland’s policy making includes a strong practice of consultation and citizen engagement, including with Finland’s diverse civil society. Continuing established practices of engaging in dialogue with experts, including the Development Policy Committee, when formulating development policies will enable the MFA to effectively plan for the significant changes underway, explore trade-offs and ensure policies are owned and implementable by key stakeholders. Communication efforts by the MFA and work by civil society on development awareness have contributed to the 2030 Agenda becoming a widely accepted aim in Finland. As Finland’s foreign and security context evolves, rebuilding MFA activities to raise development awareness, including in partnership with civil society, will be key for the MFA to fulfil its function.